Global financial markets soared on Monday following a surprise breakthrough in US-China trade negotiations that resulted in a temporary 90-day truce. Under the agreement, both nations will significantly roll back tariffs on each other’s imports, offering a short-term reprieve to businesses and investors. Despite the rally, analysts remain cautious, noting that deep-rooted disputes remain unresolved.
The pact, negotiated in Geneva by US Treasury Secretary Scott Bessent and Chinese officials, will see American tariffs drop from 145% to 30% and China’s from 125% to 10%. The deal eases tension in a conflict that had stalled nearly $600 billion in trade. President Donald Trump hailed it as a major victory, claiming it would lead to a fully open Chinese market, although officials later acknowledged that major issues still linger.
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Wall Street responded strongly, with the S&P 500 and Nasdaq hitting multi-week highs. However, trade analysts warn that the truce is more of a tactical pause than a substantive solution. Business leaders remain wary, pointing out that even reduced tariffs are still a burden, and many are reluctant to make long-term commitments until there’s more clarity.
Politically, the move could influence the upcoming US presidential election, especially in manufacturing-heavy states. Trump’s aggressive trade stance has drawn mixed reactions, with critics arguing that tariff-related costs are being passed on to American consumers. Others say the truce shows flexibility and could pave the way for a more stable trade environment.
